EU and Switzerland sign linking agreement

On 23 November 2017, the European Union and Switzerland signed an agreement to link their emissions trading systems.

This follows the decision by the Council of the European Union (EU) on 10 November authorizing the signing of the linking agreement between the EU and Swiss emissions trading systems. The agreement is now with the European Parliament, which must approve the decision before it can be adopted by the Council. This is expected in early 2018. The agreement also requires the approval of the Swiss Parliament in order to ratify the agreement. Concurrently, Switzerland is working on the inclusion of the aviation sector in their ETS, which is a necessary pre-condition for the linking agreement to enter into force.

Once the systems link, market participants in both the Swiss and EU ETSs will have the option of using allowances from both markets for compliance. Negotiations between the European Commission and Switzerland began seven years ago and were concluded on the technical level in January 2016. The linking process was put on hold following a Swiss referendum on immigration and worker quotas. Following a change in the legislation last December, the linking process was put back on track. According to press releases from the European Commission and Switzerland the agreement could be signed before the end of the year, with the link becoming operational in 2019.